Gloria Jean's Coffee Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$209,919 - $541,372
Franchise Fee
$30,000
Total US Locations
40
Business Summary
Gloria Jean's Coffees offers franchises to operate stores and kiosks that sell gourmet coffees, teas, and coffee-based beverages, along with related supplies, accessories, gifts, baked goods, and other foods. These locations provide a variety of coffee drinks, teas, and food items to customers.
Corporate History
Gloria Jean's Gourmet Coffees Franchising Corp. was incorporated in Illinois on May 30, 1986, originally as Gloria Jean's Coffee Bean Franchising Corp. The company began selling franchises for its GJC Stores in 1986. The brand name evolved over time, changing to "Gloria Jean's Gourmet Coffees" in 1993 and later to "Gloria Jean's Coffees" in 1997 for new stores. The franchisor's ultimate parent company is Retail Food Group Limited (RFG Ltd), an Australian entity established in 1989, which is a large multi-brand retail food franchisor and coffee roaster globally.
Financial Overview
Investment Range
$209,919 - $541,372
Franchise Fee (Low)
$30,000
Franchise Fee (High)
$30,000
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$121,000
Equipment Costs (High)
$358,000
Working Capital
$20,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Going concern qualification
Financial Health Notes
The franchisor's affiliate, Retail Food Group USA, Inc. and its subsidiaries (including Gloria Jean's Gourmet Coffees Franchising Corp.), have experienced continued losses and a lack of working capital. This financial condition raises substantial doubt about their ability to continue operations as a going concern. To address these concerns, the ultimate parent company has committed to providing all necessary financial support to enable the company to sustain its operating activities.
Financing Details
Gloria Jean's Gourmet Coffees Franchising Corp. does not offer any direct or indirect financing arrangements to its franchisees. The franchisor also does not guarantee any notes, leases, or other obligations for franchisees.
Performance Metrics
Total US Locations
40
Franchised Units
40
Corporate Units
0
Avg Square Footage
919
Franchising Since
1986
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
2
Litigation Summary
Gloria Jean's Gourmet Coffees' ultimate parent company, Retail Food Group Limited (RFG Ltd), and its affiliates have been involved in two litigation cases in Australia. One concluded case, filed in December 2020 by the Australian Competition and Consumer Commission (ACCC), alleged unconscionable behavior and misleading conduct by RFG, including selling corporate stores operating at a loss to franchisees without disclosure and improper marketing fund payments. This case was settled in December 2022, with RFG making payments and waiving debts for affected franchisees, but without admission of guilt or pecuniary penalties. The second case, filed in October 2021, is a pending class action against RFG Ltd and others, brought on behalf of Michel's Patisserie franchisees. This litigation alleges breaches of franchise agreements and consumer law related to changes in the Michel's Patisserie franchise model. Gloria Jean's brand itself is not directly involved in this pending matter, and RFG Ltd is vigorously defending the allegations.
Bankruptcy History
Gloria Jean's Gourmet Coffees Franchising Corp. has no bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their Gloria Jean's Coffees franchise, franchisees must provide written notice, maintain possession of or secure an approved location, and ensure their store complies with all current design, operational, qualification, and training standards. They must have been in substantial compliance with their Franchise Agreement throughout the initial term, sign the franchisor's then-current form of franchise agreement (which may have different terms, including fees), pay a renewal fee, and execute a general release. The franchisor may also require franchisees or their personnel to attend additional retraining programs and may request detailed profit and loss statements or other financial records.
Training & Support Program
Franchisor Assistance
Before opening a Gloria Jean's Coffees store, the franchisor assists with site approval and can provide optional real estate management services through a third-party consultant (for a fee of $3,000 to $5,000). Gloria Jean's Coffees provides standard design and layout specifications, reviews and approves architectural drawings, and offers electronic access to an operating manual. They also advise on equipment, furniture, fixtures, and initial inventory, and provide a list of approved products and suppliers. Initial training is provided, and a franchisor employee may assist for up to three days during the grand opening, which is supported by an advertising, marketing, and promotion package (after a $10,000 fee). Ongoing assistance includes providing reasonable training for new managing owners and offering refresher or ongoing training (potentially for a fee if due to franchisee non-compliance or excessive requests). The franchisor advises on operating performance, offers guidance on methods, products, purchasing, advertising, and administrative procedures, and may recommend pricing strategies. They also notify franchisees of any required repairs or appearance deficiencies and provide advertising and promotional materials, which may incur direct costs plus shipping and handling.
Initial Training Hours
120
Training Location
Chicago, IL
Ongoing Support
After opening, Gloria Jean's Coffees provides ongoing support to franchisees, including reasonable training for new managing owners and optional refresher or additional training, for which a fee may apply if necessitated by franchisee non-compliance or excessive requests. The franchisor advises on the store's operating performance based on submitted reports and inspections. Assistance may include guidance on operating methods, authorized products, purchasing, advertising, administrative procedures, and recommended pricing strategies. Gloria Jean's Coffees also notifies franchisees of any needed repairs or appearance improvements and helps with product and supplier quality. The franchisor develops advertising and promotional materials that franchisees can utilize, potentially for a fee covering production and delivery costs. Franchisees are also required to attend mandatory annual meetings, conventions, and conference calls.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Hands-On
Territory Type
Protected
Territory Size Requirements
Gloria Jean's Coffees street/non-mall locations receive a Protected Territory defined as a 1/2 mile radius around the GJC Store, within which the franchisor will not operate or authorize other GJC Stores (excluding mall outlets). For Area Development Agreements, development areas are typically defined by zip code or county boundaries, highways, physical landforms, city or municipality boundaries, and other factors deemed appropriate by the franchisor.
Staffing Notes
Gloria Jean's Coffees requires the franchisee (or a designated Managing Owner if the franchisee is a business entity) to personally participate in the direct operation of the GJC Store. The Managing Owner must be a natural person owning at least 10% interest in the franchisee entity and must successfully complete the initial training program. If the franchisee owns three or more GJC Stores, Gloria Jean's Coffees may require the franchisee to hire a District Manager to oversee development and operations, in addition to the Managing Owner. The franchisee is responsible for hiring all other store employees, training them to Gloria Jean's Coffees standards, and maintaining a sufficient staff. Management personnel may also be required to sign confidentiality and non-competition agreements.